2011-04-05 (Tues)

Yesterday 2011-04-04 (Mon) I wrote nothing on my Blog yet has continued to research and reflect on my Thesis, and this morning 2011-04-06 (Wed) I continue to do so to find reasons to support and rebuke my own theories.

I hear more and more analysts coming on CNBC to talk postive the USDJPY trade not to mention former minister Mr. Yen from Japan predicted a bold move to 90.  USDJPY is currently at 85.312 (2011-04-06, 01:46 am EST) up from yesterday the pair has been on an up-trend since March 17th, 2011.

I recall last week 03/31st I asked LB regarding his view on USDJPY and he also agreed on the move up to 85/86 range.  Understanding LB's view may have changed during the days since I will not know if he has a position or his subsequent trades unless I see his blotter but I have a feeling he will continue riding the trend until it shows signs of reversal.

As for me I have been going back to charts as far as year 1986 and understand the March 2011 low is repeated only in year 1995 and was an abrupt V-shaped recovery and rally until year 1998 for the USDJPY to reach 147.  This is really scarely for me and yet I still remain in my position as the margin is holding, the loss is an irritation slightly distracting and a trickling drain of my mental capital.

My two other positions Copper May 2011, and Nikkei 225 has both moved in my favour and this has left me with a comfortable margin to consider opening a 4th position or adding to my existing three positions all of which are still out of the money.

Some may comment I should not throw good money after bad, that I should cut my losses and start fresh.  Well I have considered that over the weekend and in fact on last Friday I had almost sold everything to cash, and to start new positions on Monday.  However I decided not to be emotional but instead spend the weekend researching instead.

Thus to this moment I still have all three positions running unchanged, and my account equity has risen 10% from Friday to this moment on Wed morning simply because the volatility has subsided and prices have come back to moderate levels.

Currently I have the following positions;
Long 50 contracts Copper May 2011 with ACB of 437.88
Short 100000 USDJPY with ACB of 82.458
Short 1300 contracts Nikkei 225 with ACB of 9557.38

Copper May 2011 is currently at 431.03 (2011-04-06, 02:10 am EST)
USDJPY is currently at 85.269 (2011-04-06, 02:10 am EST)
Nikkei 225 closed Wed trading at 9603.40 (2011-04-06, 02:11 am EST)

I went back and forth Silver May 2011 currently at 39.306 (2011-04-06, 02:13 am EST) and just could not bring myself to Long, yet I would not Short as I understand the crowd is always right and dare not run against the tide as I have already done so on USDJPY.

The Gold Silver ratio is far away from its historical ratio of 50, and my Candles have been running up almost daily like a rocket ship yet still linear at 45 degress.  Until the chart turns parabolic I should not fear an over-bought state, but this is just one indicator.  My other indicators already show short-term over-bought thus this is not a comfortable place to enter a trade.

If I were a fund manager what would I do?  Can I report again to my unit holders that our fund is not holding silver and gold?  How would my unit holders react, and will they pull money out of our fund if they learn I have zero exposure in gold and silver?  Ultimately history will be the judge and by history I only refer to the next 90-days which will be the end of the 2nd quarter ending June 30th.  Rule-Number-One is not to loose client's money, and so for now I will not force myself to enter any Gold or Silver positions because I am really not comfortable with both trades at least this morning.

Crude May 2011 is currently at 108.145 (2011-04-06, 02:29 am EST) and I kick myself now for closing out my positions at 104.95 on March 22nd, 2011.

Yet to be fair to myself I reviewed my trade blotter and stand by my collective reasons for doing so at the time as there were other issues to consider.  Like any expired relationships I court Futures and when the trade is over it should no longer leave a taste in my mouth only the lessons learnt and a better trader going forward.

Wheat May 2011 is currently at 787.75 (2011-04-06, 2:37 am EST) and it has courted 796.63 on 2011-04-05, 05:20 am EST.  I am still itching to Short, and have decided not to open any positions until I have rid myself of the mentor anchor that I should only Short and not Long this commodity.  Best so to leave it alone for now for I have no need to prove anything to myself.

This entry is getting too long and distracting and so I shall return full-time to my screens, after I enjoy a bowl of tasty Tomato soup with chunks of chicken meat and onions.  Yes I have modified the recipe by adding chicken and onions which I cut under water to avoid the tears.

Stay tuned.

Jeff
(2011-04-06, 02:41 am EST)